The global economic outlook remains subdued and plagued by uncertainty, according to the latest Chief Economists’ Outlook released today, as the global economy continues to grapple with headwinds due to tight financial conditions, geopolitical divisions and rapid advances in generative artificial intelligence (AI). ).
More than half (56%) of chief economists expect the global economy to weaken in 2024, and seven in 10 say the pace of geoeconomic fragmentation will accelerate, according to the latest Chief Economists’ Outlook.
Two-thirds said industrial policies will create new pockets of growth, but most warn of growing fiscal tensions and divergences between higher- and lower-income economies.
“Generative AI is seen as increasing productivity and innovation, and experts are notably more optimistic about the benefits AI brings to high-income economies,” says the press release released this morning.
Davos 2024: China expects “moderate” growth
The outlook for South Asia and East Asia and the Pacific remains positive and largely unchanged compared to the last survey, with a large majority (93% and 86% respectively) expecting at least moderate growth in 2024.
China is an exception, with a smaller majority (69%) expecting moderate growth as weak consumption, lower industrial production and housing market concerns weigh on prospects for a stronger recovery.
World Economic Forum: weak expectations in the US and the EU
In Europe, the outlook has weakened significantly since the September 2023 survey, with the share of respondents expecting weak or very weak growth almost doubling to 77%.
In the United States, the Middle East and North Africa, the outlook is also weaker, with around six in 10 respondents predicting moderate or stronger growth this year (compared to 78% and 79% respectively).
World Economic Forum and its perspectives for Peru and Latam
However, There is a notable rebound in growth expectations for Latin America and the Caribbean – the region in which Peru is located -, sub-Saharan Africa and Central Asia, although opinions continue to be of generally moderate growth.
Thus, 30% of those surveyed considered that the Latin American and Caribbean region will have a significant recovery in the current year, although 26% also considered that there will be significant progress in inflation.
Davos 2024: geopolitical divisions aggravate uncertainty
About seven in 10 chief economists expect the pace of geoeconomic fragmentation to accelerate this year, with a majority saying geopolitics will stoke volatility in the global economy (87%) and stock markets (80%), increase location (86%). ), strengthen the geoeconomic blocks (80%) and widen the North-South gap (57%) in the next three years.
As governments increasingly experiment with industrial policy tools, experts are almost unanimous in expecting these policies to remain largely uncoordinated across countries. While two-thirds of chief economists expect industrial policies to enable new pockets of economic growth and vital new industries to emerge, a majority also warn of rising fiscal tensions (79%) and divergence between older economies. and lower income (66%). .
Source: Larepublica
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